The Chinese University of Hong Kong-Tsinghua University Joint Research Center for Chinese Economy 清華大學-香港中文大學中國經濟聯合研究中心 - The dynamic effect of rural-to-urban migration on inequality in source villages: System GMM estimates from rural China The Chinese University of Hong Kong-Tsinghua University <br/>Joint Research Center for Chinese Economy 清華大學-香港中文大學中國經濟聯合研究中心
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The dynamic effect of rural-to-urban migration on inequality in source villages: System GMM estimates from rural China
Wei Ha, Junjian Yi, Ye Yuan, Junsen Zhang

Using a newly constructed panel dataset that covers the 14-year period from 1997 to 2011 for more than 100 villages in China, this study analyzes the dynamic effect of rural-to-urban migration on inequality in source villages. Given that income inequality is time persisting, we use a system GMM framework. We found that the dynamic relationship between migration and income inequality is inversely U-shaped. Specifically, contemporary migration increases income inequality, whereas lagged migration has a strong income inequality-reducing effect on the sending villages. A 50 percent increase in the lagged migration rate translates into a one-ninth to one-tenth standard deviation reduction in income inequality.

453
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The dynamic effect of rural-to-urban migration on inequality in source villages: System GMM estimates from rural China
Wei Ha, Junjian Yi, Ye Yuan, Junsen Zhang

Using a newly constructed panel dataset that covers the 14-year period from 1997 to 2011 for more than 100 villages in China, this study analyzes the dynamic effect of rural-to-urban migration on inequality in source villages. Given that income inequality is time persisting, we use a system GMM framework. We found that the dynamic relationship between migration and income inequality is inversely U-shaped. Specifically, contemporary migration increases income inequality, whereas lagged migration has a strong income inequality-reducing effect on the sending villages. A 50 percent increase in the lagged migration rate translates into a one-ninth to one-tenth standard deviation reduction in income inequality.

453